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When Will GM Stop Being "Government Motors"?

Technically, GM has already paid back its $49.5 billion bailout loan. It's tired of being called "Government Motors". But the name has stuck -- and when all is said and done, taxpayers are likely to come up short.

The simple answer is "yes". The U.S. government still owns some GM stock. But it won't for much longer.

General Motors (NYSE:GM) picked up its "Government Motors" nickname after it emerged from bankruptcy in 2009, a bankruptcy assisted by $49.5 billion in government loans. At that time, the U.S. government held over 60% of GM's common stock, and GM still owed taxpayers billions.

Many thought the bailout was necessary. Even Ford (NYSE:F) lobbied for it. But resentment over the politics of the bailout, and to some extent over the way GM had been run into the ground by its prior management, helped the name stick.

But here's something that you might not know: The government's GM stock will all be sold before long, and GM repaid the last of the cash it owed three years ago.

In the end, it might still come up short. Read on.

Technically, GM paid back taxpayers three years agoGM's agreement with the U.S. Treasury's TARP program was that it would pay that $49.5 billion loan back with a mix of cash and stock. You probably know that. But what you might not know is that that payback has already happened, technically speaking.

Yes, it's true. Looking strictly at the terms of the original deal, GM has already paid back taxpayers – ahead of schedule, and with interest. It has been a done deal for over three years now.

But that doesn't mean that the U.S. Treasury has recovered all of its "investment" in GM. The problem is that GM's stock isn't worth as much now as the government had assumed back in 2009, when it first set up the deal.

That means the government hasn't collected quite as much as you'd think. Through the end of March, the government had recovered about $30.4 billion of the $49.5 billion loan. Here's how it breaks down:

$13 billion via GM's IPO, when the government sold about 45% of its stock holdings.

$2.1 billion when GM bought back some preferred stock from the government in late 2010.

$5.5 billion when GM bought back 200 million of the government's remaining 500 million shares last December. That was when the Treasury Department announced that it would sell off its remaining GM stock over the next 12-15 months.

$1.26 billion in stock from the GM shares sold on the open market by the Treasury in the first three months of 2013.

The remainder is made up of interest and dividends on the loans and preferred stock.

That $30.4 billion total has gone up somewhat since, because the Treasury Department has continued to sell its stock since the end of March. And it will continue to sell until it's all gone, probably sometime early next year.

But here's one thing that's almost certain: When all is said and done, the Treasury Department is likely to come up short.

Should GM make taxpayers whole even if it isn't required?The Treasury Department said this week that it still had 241.7 million GM shares, almost 18% of GM's total. All of those will be sold by sometime early next year.

But unless the price of GM's stock skyrockets, and soon, the government is going to come up well short of the $49.5 billion that it lent to GM.

In fact, it could come up short by $10 billion or more.

How will GM's management handle that?

I don't know. GM won't be required to do anything, of course. But it might feel the need to do something, if only to bring the "Government Motors" era to a true close.

What do you think? Should GM make one last big payment to square accounts? Or has GM done enough by living up to its end of the deal and creating 23,000 new jobs in the U.S. since its bankruptcy?